App users hope for a fare go

Katie Cincotta

The goCatch ordering form and location maps allow the fare and the driver to know each other's whereabouts in real time.

TRAIN commuters have ''quiet carriages'' on some services. The next welcome addition to public transport would be a cab service that doesn't take the scenic route home because your driver has no clue where he's going, one that's ready to go when you are, and is preferably free of unwelcome music, body odour and a broken eftpos system.

Two-thirds of respondents in a Tour and Transport survey in 2010 rated customer service in cabs as ''poor'' and ''very poor''. Complaints to the regulator, the Victorian Taxi Directorate, had trebled in the five years from 2005 to 2010, up from 1564 in '05 to nearly 5000 in '10. (There were 4000 complaints to the directorate in 2011 but the mechanism for lodging had been changed - they now must be submitted in writing using an online form; previously, you could phone in complaints.)

Besieged by bad behaviour from drivers and passengers alike, the Victorian government is pulling rank on the industry, using the results of a 16-month inquiry headed by Allan Fels, former chairman of the Australian Competition and Consumer Commission, as its main tool to drive change.

The Fels taxi inquiry report recommended changes to make the industry more competitve and improve services.

Fels' final report to the government, which was tabled in Parliament in December, offers 145 draft recommendations designed to lift standards and restore consumer trust in the taxi and hire-car industry, into which Victorians are paying $120 million a year for services.

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''The inquiry is recommending a comprehensive reform package that will unleash the dynamic forces of competition in an industry that has been largely shielded from these forces for decades,'' the Fels report says.

The key changes that will affect Victoria's 15,000 taxi drivers and 2600 hire-car chauffeurs include more stringent requirements for drivers, new knowledge exams, a fare restructure and a reduction in car licences (valued at what Fels called a ''dead weight'' of $475,000 when the inquiry began in 2011) to a one-off set price of $40,000 for a metropolitan prebooked-only (PBO) licence and $20,000 a year for a metro taxi zone licence.

The changes could transform the industry dominated by two main taxi companies and one payment system, and create space for new global players such as Uber, an on-demand hire-car service app that lets you see and book vehicles through your smartphone. Two years since its launch, the San Francisco start-up is now operating in 26 cities around the world, with 100 luxury cars on the grid in Sydney since launching in October, and 15 vehicles in Melbourne.

Once you've downloaded the Uber app and registered your details (including a phone scan of your credit card), you can see the cars - the all-black fleet comprises recent-model Chrysler, Lexus, Holden Caprice and BMW vehicles - in your area onscreen, moving like ants through the streets.

Ordering one takes seconds. (The two I requested on January 31 were on my doorstep in 11 minutes - 25 kilometres from the city centre - and in three minutes, on Spring Street, complete with an open door, a bottle of water and a query about the airconditioning settings.

The Uber service meets many of the reforms proposed in Fels' inquiry, including better, safer cars, and more choice, reliability, availability and innovation - but it does come at a cost. These hire cars are 30 per cent more expensive than a present cab fare, with Uber taking a 20 per cent commission.

All Uber drivers must have a current hire-car licence, insurance, and pass a personal interview and city knowledge test.

But it is the customers who determine the continuing employment of the drivers, by rating them at the end of each trip (Uber periodically sacks poorly rated drivers).

While passengers await the arrival of their Uber car, the app allows them to see the driver's photograph, licence plate number, and star rating.

Uber general manager in Sydney, David Rohrsheim, says the feedback works both ways, with drivers also able to rate passengers, creating a greater sense of accountability.

''What changes driving from unsafe to safe is removing the anonymity,'' he says. ''When you know who the driver is and who the passenger is, people behave differently. Taxi drivers can be rude and useless because they know you can't choose who you get next, but now you have an opportunity to give feedback.''

Location-based app goCatch, developed in Sydney by entrepreneurs Andrew Campbell and Ned Moorfield, also relies on a rating system to connect passengers and taxi drivers.

With 100,000 downloads and 5000 active drivers using the system to get fares, the company's biggest surprise since starting up has been the growth and profitability of short fares, which directly addresses the ''short fare refusal'' concerns raised in the Fels report.

''Drivers are attracted to the large $50-plus fares and so, often ignore short fares,'' chief executive Andrew Campbell says. ''Our drivers are being rewarded for picking up short fares and are telling us they have never made so much money.''

Campbell believes app-requested jobs reduce the risk for driver and passenger, as they can see each other's location on a map in real time, creating a fast connection (goCatch takes 10 per cent of each fare made through its network).

According to goCatch booking data from November and December 2012, the hardest place to catch a cab in Melbourne is in the outer east, but Campbell says location-based apps are changing this. ''Drivers will take a passenger to the outer suburbs and then drive an empty cab back into the city - a return trip that is entirely unprofitable,'' he says.

''We improve the driver's chances of picking up a customer in a remote area.''

Campbell says his company refers matters of bullying and threats to the ACCC. ''We're talking about people's livelihoods … [drivers] just trying to provide better service and run their business more efficiently,'' he says.

The NSW Taxi Council has expressed concern about the new players. It says its gripe is not with the technology, but that booking apps aren't regulated.

''Taxi networks guarantee that the booking is allocated to an accredited driver in a roadworthy vehicle; that the trip is tracked with GPS; security cameras can be made available to police; that the regulated fare is charged; that any complaints are fully investigated; and that efforts are made to return any lost property,'' a spokesman says.

The council says it costs significant amounts of money to meet the government's regulations, and claims apps-based fleets are ''relying on the taxi industry's reputation for safety without the need to comply with any of the regulations or the degree of accountability that makes the industry safe''.

''A regulated system needs to have a level playing field,'' the council says.